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Friday, January 8, 2010

Money : How to Motivate Yourself To Save

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Many of us would like to have money in savings. Having some money set aside can make a huge difference in our ability to reach for our dreams.

But when you’ve got a long way to go before you meet your financial goal, and when – frankly – a dollar spent now seems to provide a lot more pleasure than a dollar saved, how can you make sure you’re motivated enough to put money aside on a regular basis?

Some tips for you…

1. Save Little And Often

How about saving just a dollar or two each day? Most of us can cut a couple of dollars of unnecessary spending every day (how about skipping that latte, carpooling, ditching your daily newspaper..?), over the course of a year, you’ll have saved several hundred dollars.

2. Read Personal Finance Blogs

I find that I get encouraged to save – and to adopt good financial habits in general – by reading about others’ tips and success. One of my must-read blogs for this is The Simple Dollar; Trent writes very well, and covers topics in-depth without making them too complicated. Other good blogs on personal finance are Get Rich Slowly and Wise Bread.

3. Keep a Savings Log

Something that’s often recommended for those sorting out their finances is to keep a spending log – to write down what you spend, so that you have a clear picture of where all the money is going.
A twist on this, though, is to keep a savings log. Each time you make a deposit into your savings account (or each time you shove a few dollars into the jam jar hidden under your bed), write down the date and how much you saved. This can be a great way to motivate yourself to save more.

4. Save Towards A Specific Goal

Having a very clear goal in mind can make it much easier to save up. Your end reward might not be a tangible thing like a vacation or a new purchase: it might be peace of mind, or a sense of security or freedom. Consider visualizing how you’ll feel once you have your target amount in the bank. Will it take a weight off your shoulders? Will you be proud of what you’ve achieved?

5. Automate Your Savings

Get your bank to transfer $100 (or $200 or $500 etc) from your checking account into a savings account, at the start of each month. If the money goes out without you having to lift a finger, chances are that you’ll simply let it head off into the savings pot …

There are plenty more ways to motivate yourself to save – so let’s hear some of your best tips in the comments!